Digital Economy and Environmental Quality: Insights from the Spatial Durbin Model

Area of Science:

• Environmental Economics
• Digital Economy Studies
• Urban Planning

Background:

• Global focus on carbon neutrality and economic development.
• Digitalization is a potential tool for reducing carbon emissions (CE).
• Limited empirical research exists on the digitalization-CE relationship.

Purpose of the Study:

• To construct a digitalization index for Chinese cities.
• To analyze the impact mechanism and influence of the digital economy (DE) on urban carbon emissions.
• To provide policy recommendations for improving urban environmental quality.

Main Methods:

• Constructed a digitalization index using the entropy value method and spatial Markov chain.
• Employed the spatial Durbin model to analyze urban carbon emissions in 265 Chinese cities (2011-2017).
• Examined the indirect effects through industrial structure, inclusive finance, and urbanization.

Main Results:

• The digital economy (DE) has a significant spatial effect on urban environmental pollution, varying by neighborhood context.
• DE directly reduces urban environmental deterioration and indirectly impacts it via industrial structure, inclusive finance, and urbanization.
• DE development lowers pollution in urban agglomerations but increases emissions in non-urban agglomeration cities.

Conclusions:

• Digitalization is a key factor influencing urban carbon emissions with complex spatial effects.
• The impact of digitalization on emissions is mediated by economic and urbanization factors.
• Targeted policies are needed to leverage digitalization for environmental improvement, considering urban context.